How much trouble is Rachel Reeves in over rental rule break?

Ministerial Code and the Apology

The situation hinges on a specific interpretation of the Ministerial Code and the discretion afforded to the Prime Minister's (PM) ethics advisor.

Did the Chancellor Break the Ministerial Code?

The PM's position, as communicated via Sir Keir Starmer and Sir Laurie Magnus, suggests that the Chancellor did commit a technical breach of the expected standards, although it was unintentional.

• Ministerial Code Standard: The Code requires ministers to uphold the highest standards of propriety and ensure that no conflict arises, or appears to arise, between their public duties and their private interests. Furthermore, ministers are expected to be scrupulous in the observance of the law.

   

• Implied Breach: By failing to obtain the legally required selective licence before renting out the property, Ms Reeves failed to observe a housing law. This failure, even if "inadvertent," constitutes a breach of the standards expected under the Code. The fact that an apology and a remedy were required implies that a breach did occur.

   

Is the Apology Sufficient to Avoid an Inquiry?

According to the explanation provided by Sir Keir Starmer, the Prime Minister and his Independent Advisor on Ministers' Interests, Sir Laurie Magnus, decided that the apology was sufficient to close the matter without a formal inquiry.

• The Resolution Clause: Sir Keir referenced the clause in the Ministerial Code that explicitly states that, under some circumstances, an apology is the appropriate resolution.

• Ethics Advisor's Ruling: Sir Laurie Magnus, the independent ethics advisor, ruled that a further probe was not required due to three key factors:

  1. The mistake was inadvertent (unintentional).

  2. Ms Reeves took immediate action to rectify the breach (applied for the licence).

      

  3. She sincerely apologised for the omission.

In short, yes, the PM's position effectively acknowledges a technical breach of the law and, therefore, the Code. However, the decision was made that the quick, voluntary remedy and apology provided a proportionate and sufficient resolution, thus preventing a formal, time-consuming inquiry. This approach allows the PM to uphold the "standards" while protecting a key minister from a drawn-out political crisis.

⚖️ Legal and Political Implications

While the ministerial ethics issue appears resolved for now, the legal and political implications remain open.

Potential Fine and Legal Action

The legal threat is tied to the Southwark Council's decision:

• The Law: Section 95 of the Housing Act 2004 makes it a criminal offence for a landlord to operate a property without the required selective licence, unless they have a "reasonable excuse."

• The Defence: Ms Reeves' team is using the argument that the mistake was inadvertent and that her letting agent failed to notify her as the "reasonable excuse."

• Council's Decision: The central legal question now is whether Southwark Council accepts this excuse or decides to pursue action. If they decide to prosecute or issue a fine, it would reopen the political crisis, as the severity of the offence would be confirmed by an external legal body.

Political Judgment

The political judgment surrounding this episode is about two things: hypocrisy and trust.

• Hypocrisy: The Conservatives are seizing on the fact that Ms Reeves has been a vocal supporter of selective licensing in her own constituency. The argument is that it's "laughable" to endorse such initiatives while failing to comply with them privately.

• Trust: This incident attacks the personal and political wisdom of the Chancellor, who has been positioned by Labour as the competent economist whom the public can trust with the nation's finances. The suggestion that she was not prudent enough to double-check a simple legal requirement, despite her public role, is intended to erode that trust ahead of the upcoming Budget.

The Conservatives have raised the political stakes by calling for her sacking, framing the issue as "one rule for them and another for everybody else," which is a powerful charge in political discourse.